20th  August, 2006  Volume 13, Issue 6

First with the news and free with its views                                     First with the news and free with its views                             First with the news and free with its views                                    



• Kofi Annan tells Mahinda to address
   humanitarian crisis

• President says ready for talks tomorrow

• Mangala wants focus on political solution

• President gives blessings for peace march

• People before Hague for lesser offences
  says one diplomat

International pressure mounts
as MR looks for exit strategy

Mahinda Rajapakse, Kofi Annan 
and Mangala Samaraweera

With the escalation of violence taking a heavy toll both militarily and economically on the government as well as the LTTE, President Mahinda Rajapakse was last week once again looking at the prospect of reviving the peace process notwithstanding threats by the JVP to withdraw support unless the war effort is pursued vigorously.

Unlike the LTTE which is not dependant on a formal economy, the government is, and the impact of war has already begun to tell with horror stories from Sri Lanka filtering to the outside world and investors running for cover, not to mention even a touring cricket team - South Africa.

To the outside world therefore, Sri Lanka is a country at war and no amount of sugar coating of the ground realities helped dispel the perception that the aerial bombardment in Mullaitivu by the security forces killed school girls at a children's home or for that matter the state was preventing relief supplies from reaching thousands of civilians displaced due to the fighting.

Equally negative was the publicity that 17 aid workers of an international non governmental organisation were brutally lined up and gunned down in Muttur as were the charges the state prevented civilians from fleeing conflict areas in the north to safety by the imposition of curfews whilst also blocking UN relief agencies going into Tiger territory to provide humanitarian relief to affected civilians.

Thus a picture of a mini Rwanda was being unveiled before the world and no amount of media spin and hype locally helped the government overcome this image internationally despite the LTTE's own human rights abuses.

Pressure points

To the world at large, the LTTE was a terrorist organisation banned in several countries but a clear distinction was drawn between them and the Tamil people and it is this important distinction the government failed to comprehend resulting in international pressure being brought to bear on President Rajapakse.

That legitimate governments are held to higher standards of accountability, the US has already gone on record as stating in Colombo and this position was being reiterated by the world community last week and also US Principal Deputy Assistant Secretary of State for South and Central Asian Affairs Steve Mann who flew in specially to Colombo on Thursday to convey a tough message to Rajapakse on the humanitarian crisis and the need to get back to the negotiation table.

The President no doubt given this pressure was in an unenviable position having to keep the international community happy with assurances of addressing human rights issues on the one hand whilst at the same time keeping the security forces morale high and the JVP on board with assurances of continuing the war effort.

Working at cross purposes

But it is the President's failure to project a clear policy and a consistent agenda that has lost him the initiative with different arms of the government working at cross purposes much to the consternation of the international community and the donor agencies all of whom were slowly but surely strangulating Rajapakse politically.

For example, soon after the Mawilaru anicut issue surfaced, the Government Peace Secretariat issued a statement calling it a war crime and urged Norway in particular and the international community in general to urge the LTTE to restore the water supply.

And then when the Norwegians secured an unconditional agreement from the LTTE and proceeded to open the sluice gates, the security forces opened fire with the government claiming it is the state's irrigation officers who must open the gates and Defence Spokesperson Keheliya Rambukwella adding it will be done after the military secures the area.

To make matters worse, JVP's Propaganda Secretary, under the cloak of patriotism not only indicated to the LTTE but also the international community the real follow up strategy of Mawilaru by stating the security forces must proceed to secure Sampur and consolidate its position to ensure a possible threat on Trincomalee.

These conflicting signals from the government coupled with the aerial bombardment in the north east gave credence to reports the President was following a war strategy  to please the JVP and with the number of refugees also on the rise, intense pressure came to be applied by the international community even though the state kept saying it was only taking defensive action against LTTE aggression.

In fact, on Tuesday, August 15, diplomats of the European Union nations in Colombo met Foreign Minister Mangala Samaraweera and urged him to get back to the negotiating table and also address the humanitarian crisis in the country and though Samaraweera made a strong case for the government, the diplomats were none too impressed with explanations the Minister gave, insisting on respect for the CFA by both parties.

International pressure

The knock on effect the entire war environment had on the economy given the international pressure was particularly felt by the likes of Treasury Secretary P.B. Jayasundera, who made it clear to the relevant authorities the importance of looking at an exit strategy to get the peace process back on track. To him the consequences of a prolonged conflict would be disastrous particularly in economic terms with key sectors vulnerable to attacks.

That the schools had to be closed the very day the LTTE accused the government of killing 61 school girls in Mullaitivu and threatening to target civilians in the city as per an agency report further to the claymore attack on Pakistani High Commissioner Bashir Wali Mohomand's convoy and the exit of the South African cricket team citing security concerns only added to this sense of insecurity gripping the country.

And by Monday, the President was beginning to feel the pressure and explored the possibility of sending a special emissary to talk with the LTTE whilst at the same time calling for a diplomatic offensive to project the government's position as the aggrieved party in the conflict.

Towards this end, the military was asked to prepare video footage of the 'defensive' action taken by the state in Mawilaru, Muttur, Mullaitivu and other areas in the north east for dissemination, with the foreign ministry told to brief the international community on the government's preparedness not only to address the humanitarian issues but also resume talks with the LTTE immediately. The services of the diplomatic community it was decided will also be solicited to bring back the LTTE to the table as a show of the state's bona fides.

Return to nomalcy

Such was the pressure faced by the President given the unprecedented humanitarian crisis unfolding in the north east, none other than UN Secretary General Kofi Annan telephoned him on Wednesday, August 16 at 5.50 p.m. and during the 25 minute conversation stressed the importance of a return to normalcy and providing humanitarian assistance to the thousands of affected civilians. With the President at the time were Ministers Mangala Samaraweera, Mahinda Samarasinghe, Additional Secretary  Foreign Ministry Geetha de Silva, President's Additional Secretary Gamini Senaratne and protocol officer of the Foreign Ministry M. Jaseer.

Annan told the President during the course of the conversation it was important for both parties to respect the ceasefire agreement and return to the negotiation table and end the suffering of the people.

The UN Secretary General made particular reference to the UN relief agencies working in the country and urged Rajapakse to allow them access to the affected areas to carry out relief operations.

Talking tough, Annan told the President reports of the humanitarian crisis in the conflict zone were very disturbing and it was crucial for the relief agencies to be given access so that they carry out their mandate.

Using the opportunity to present his case, President Rajapakse said he does not believe in a military solution to the conflict and stands ready to resume talks with the LTTE anytime.

He went on to say it was the LTTE that was the aggressor and that the government was merely taking defensive action to ensure the territorial integrity of the country.

Not stopping at that, the President said he was committed to the peace process but was forced to deal with a terrorist threat due to LTTE's actions.

Rajapakse then proceeded to trace the sequence of events from Mawilaru and said 60,000 people suffered as a result of LTTE's actions.

"They then attacked Muttur to evict the Muslims from the area and started shelling the Trincomalee Dockyard. Then they were moving to Jaffna city. What the security forces did was a defensive role," the President said.

Added Rajapakse - "As President of the country, I do not want to see a single Sri Lankan killed. I am prepared to start talks even tomorrow. I am committed to the peace process."

The President further said, with regard to the UN agencies, humanitarian assistance was given to the internally displaced persons with the Human Rights Minister asked to co-ordinate this effort with the UN agencies.

UN concerns

Following this discussion, the President turned to the two ministers and said given the concerns expressed by the UN Secretary General, steps should be taken to allow the UN agencies to carry out their mandate in the affected areas lest the government be accused of starving the people and neglecting the sick.

Asked Minister Samarasinghe - "Sir, can you tell Mr. Gotabhaya Rajapakse to allow the UN agencies to go in?"

The President nodded his assent and told Additional Secretary Senaratne to get the Defence Secretary on line but he was uncontactable at the time but the ministers were told to take the necessary steps to enable the UN agencies to function in the affected areas.

That the President was concerned about the international pressure on the humanitarian issues as well as their call to return to the negotiation table was also evident when he briefed the cabinet of ministers later the same day on the overall strategy of the government. That the international pressure was reaching a peak, Minister Samaraweera himself had told the President following discussions he has had with diplomats and stressed the importance of changing the focus from war to peace.

With Samaraweera's advice no doubt ringing in his ears, the President told the ministers it was important to note the government was not at war and that the security forces were only taking defensive action to protect the territorial integrity of the country.

He then went on to comment on the massacre of the 17 aid workers in Muttur stating an independent investigation is underway with Australian experts called into act as observers.

"From information, I have got, the majority of families are not willing to allow the exhumation of the victims bodies. They are saying the INGO prevented them from being evacuated when fighting started. This must be looked into," the President said.

At this point, Foreign Minister Samaraweera who had the unenvious task of addressing the concerns raised by the diplomatic community on the human rights situation and the status of the peace process said whilst it was important to encourage the military to protect the country's territorial integrity, the government must not lose sight of the fact, it is committed to a political solution.

Political framework

"That position of the government must be clearly explained because the international community is saying that the political process must not take a back seat. We must give more publicity to what is happening in the All Party Conference and the steps taken to develop a political framework," Samaraweera stressed.

Supporting Samaraweera was Minister Tissa Vitharana who lamented the media did not cover the last session of the APC despite an invitation being extended.

Replied President Rajapakse - "I agree with Minister Mangala Samaraweera. It is very important to emphasise our commitment to a political solution to address the grievances of the north east people. I told Kofi Annan also I am fully committed to the peace process."

With that out of the way, the President went on to say, both Vasudeva Nanayakkara and Kumar Rupesinghe of the Foundation for Co-existence appraised him of a peace march they have organised on Thursday for which he said his full blessings were given.

"I told them to do it. It is a good development. Mervyn Silva asked me whether he can go for it and what the slogan of his banner should be.  I said the slogan showed be that the government is fully committed to the peace process," the President said.

What the President did thereby was give his blessings to a peace march organised by the likes of Kumar Rupesinghe who was a famous whipping boy of the JVP, which accused the peace activist of being a traitor to the nation. It is in promoting this campaign that Deputy Justice Minister Dilan Perera at a press conference referred to Wimal Weerawansa as a "Cardboard Wansa," and here the President himself was giving his stamp of approval to the march.

Samaraweera unhappy

Be that as it may, Minister Samaraweera who does not see eye to eye with Perera was none too happy with Rajapakse giving his blessings for the march and said it will create a precedent for party members to join processions organised by extremists as well, a sentiment MP, Dulles Alahapperuma was to also privately tell the President.

Added Samaraweera "Anyway people in the south are not against peace. Therefore it is not in the south they should march but in Kilinochchi."

But the events at the rally where some monks supportive of the JHU tried to sabotage it is now history with a message clearly going out the pro peace groups are prepared to meet fire with fire.

This march also showed a large section of the population across the political spectrum, apart from the JVP and JHU, wanted the war to end and was yet another indication the President will have much more than the international community to deal with if the current trend continues.

Samaraweera to his credit however has consistently maintained it was only through negotiations the conflict can be resolved and he reiterated this position with the diplomatic community at briefings on Tuesday and Wednesday as well, fully realising the issue was a matter of serious concern to them.

The briefing on Wednesday for the diplomatic community including the UN agencies in fact was planned to convey the government's commitment to the peace process and human rights of all civilians and with the Foreign Minister at the meeting were Human Rights Minister Mahinda Samarasinghe, Peace Secretariat Chief Palitha Kohona, Chief of Defence Staff Donald Perera, Deputy Solicitor General Yasantha Kodagoda and Military Spokesman, Brigadier Athula Jayawardena.

At the outset, Minister Samaraweera read a statement on the Mawilaru and Muttur attacks, emphasising the government's position it was purely defensive in nature.

He also dealt with the Mullaitivu attack and claimed it was a LTTE training camp and not an orphanage whilst pointing out that Australian experts had been called into investigate the murder of the 17 aid workers.

Serious concern

Thereafter, the diplomats were given a slide shown on the operations in Mawilaru, Muhamalai and Muttur with video footage of the Mullaitivu 'training camp,' also provided.  None of the diplomats questioned the date of the video or any specifics on the issue having already reached their own conclusions based on the SLMM and UNICEF reports.

However, UNDP Chief Miguel Bermeo did question the situation of the IDPs in Jaffna, Batticaloa and Trincomalee districts and the need to have access.

He said the UN agencies would like to discharge their mandate by going into those areas and doing relief work. Bermeo went on to say people in Jaffna were trapped and whilst he understood military operations were going on, it would be good to open a human corridor for the sick, injured and those fleeing the violence to be evacuated.

It was Minister Samarasinghe who was asked to deal with that issue by Samaraweera and the Human Rights Minister said the UN agencies were helping with relief work and that the Government Agent Trincomalee had said the situation was improving.

"We may have people going back to Muttur. In Batticaloa District, there are roughly 35,000 refugees in the Vakarai area. Despite security concerns the government has allowed the ICRC to go in and we are now working on the UN agencies also going in after sorting out issues. With regard to Jaffna we are in the process of arranging a ship which will take food stuff. The idea is for it to be taken under an ICRC flag," he said.

Continuing Minister Samarasinghe said, with regard to opening a 'human corridor,' he was fully supportive of it and would ask Defence Chief Donald Perera to discuss it with Bermeo.

Call to spare civilians

"Whatever happens in the Jaffna peninsula the civilians must not suffer," he added, though the words itself sounded hollow given the ground reality.

At this point, EU Ambassador, Julian Wilson referring to availability of EU funds for relief work asked Minister Samarasinghe what he meant by issues to be clarified with regard to UN agencies going into Vakarai.

Said Samarasinghe, - "You have to be patient. We have already consented for ICRC to go in. We don't want a large number of aid workers going there and exposing themselves to security risks. We are working on it."

Also making a contribution at the meeting was Australian High Commissioner Greg French who said Australia was working with the ICRC on behalf of several embassies to get foreign nationals who want to leave Jaffna out.

Needless to say it is this humanitarian crisis which had the UN Secretary General also calling the President with Sri Lanka now once again thrust into the international centre stage as a country at war with a massive civilian fall out.

Likewise the message given by the US Principal Deputy Assistant Secretary of State, Steve Mann on Thursday to the President was also to halt the violence and get back to the table and address the humanitarian crisis as a matter of priority given the international obligations cast on a government.

It is also this growing perception of human rights violations causing a negative impact that had the President inviting the UNP for discussions on Tuesday and soliciting support, especially with regard to the all party political initiative, hoping thereby to mute at least opposition domestically. (See Pot Shots.)

Donors get tough

But more trouble was in store Thursday when the bilateral donors met at the Asian Development Bank office to consider the humanitarian crisis and their response to it and if the Finance Secretary was at the meeting, he would have had goose bumps given some of the sentiments expressed. Among those present from the development community were representatives of the World Bank, ADB, UN agencies, EU, Sweden, Canada, Norway, Germany, WFP, IOM, CHA, ECHO and Sarvodaya.

After lengthy discussions, it was decided by the development community to write to the President and express concern at the unfolding developments with an emphasis on the investigations into the massacre of the 17 aid workers. In fact, there was a proposal by the representatives of the EU and Sweden for an independent report on the murders.

Representations were also made at the meeting on the importance of calling for an end to the siege of Jaffna in addition to respecting the minimum humanitarian principles including access for the injured to be moved out and not using civilians as hostages.

Interestingly one representative from a European country at the meeting even said people were being held at Hague for lesser crimes, words which some of those advocating an all out onslaught irrespective of the consequences for civilians will do well to ponder.

Tamil Nadu factor

And the most ominous signal came from Tamil Nadu also on Thursday with Chief Minister Muthuvel Karunanidhi breathing fire in the State Assembly over the Mullaitivu aerial attack, calling it an uncivilised and inhumane act and proceeding to adopt a resolution condemning the killing.

Karunanidhi was also reported as saying, "there should be a full stop to such incidents which cannot be forgiven," with Opposition Leader M. Kannappan of the MDMK calling on the Tamil Nadu government to impress upon the central government to invite a delegation of TNA  MPs whilst sending a delegation of Tamil Nadu MPs to Sri Lanka for on the spot investigations.

It is in this backdrop the President is now looking for an exit strategy to resume a dialogue and pin the blame on the LTTE  if they refuse to respond, thereby justifying continued military action.

The President has also told confidants, the JVP will have to accept the ground reality that there is no military solution to the conflict and the need to call the LTTE for talks and continuing with Norwegian facilitation in addition to the CFA. He had said for all the noises made by the Marxists, they will not withdraw support to the government since they can no longer survive on their own politically.

The international community however is not interested in Rajapakse's domestic political compulsions and want the humanitarian crisis addressed as a matter of urgency or risk a freeze on all development assistance.

The question is whether the President really cares? The answer of course is blowing in the wind.


Army thwarts LTT E in Jaffna

Soldiers stand near the body of a LTTE
 cadre killed in Muhamalai (inset) Army firing multi barrel rockets into LTTE areas from Jaffna on August 16

By Amantha Perera

One of the funnier things near Kallar two weeks back was that in the midst of artillery fire and fleeing refugees the Ceylon Electricity Board was hurriedly laying a new power line along the main road.

Workers were hanging on electricity poles and setting up new lines while just a few miles ahead army troops were getting ready to confront the Tigers in another battle. The new power line was as a result of top government officials visiting the area. 

Villagers had told them of their grievances that the main power line ran through LTTE areas and like the anicut that was under the Tiger whim, the power lines too would be. They wanted new power lines drawn from Kantale, to feel safe. Thus, even before the bulk of the fleeing civilians could return to Muttur or before the area was declared safe, power lines kept looping along.

New fronts

But the ground reality was far from stable and violence spread. On August 11 late afternoon, fighting erupted near the forward defence lines in Muhamalai that separate government and Tiger control. Both sides gave conflicting reports, that the other was the main cause for the opening up of the latest front.

The military said that the Tigers had moved cadres near the FDL and started firing mortars and artillery while the LTTE said that it was forced into taking preventive military action to stop an army onslaught into the Wanni. As has been the case in the recent past independent verification was rendered impossible - all phone lines into Jaffna, including mobile connections were cut off, civil flights too have remained suspended. Jaffna was virtually cut off from the rest of the country. Even the SLMM has found it difficult to gain access to the areas of fighting.

By night, the fighting had spread., The LTTE said that it had launched artillery attacks on the Palali air base and had in fact breached the FDL. The government admitted that artillery fired from Pooneryn area had fallen on the airfield but the runway had not been damaged and only a Bell 212 helicopter had sustained damages.

Military Spokesperson Brig. Athula Jayawardena said that no attack helicopters had been damaged.

Fighting was raging in the night and around 9 p.m. pro-Tiger news outlets reported that the LTTE air-wing was also involved in the attack. However, there was no indication to suggest that any aircraft had flown over Palali or had in fact bombed. The only certainty was that fighting had spread from the south of Trincomalee harbour area into the southern parts of Jaffna peninsula. 

Tiger artillery

By August  12, fighting was reported in Nagarkovil, Muhamalai, Kilali lagoon, on the islands of Mandaitivu and Kayts and in Trincomalee as well. The Tigers had opened fire using artillery at the Fort Frederic area from its bases in Sampur around 3 a.m. in the morning. Around 36 shells had been fired and one had landed on a container  outside the Prima factory killing a person sleeping. The firing continued for well over three hours.

On the first night of fighting 27 military personnel including three officers had died and according to Brig. Jayawardena more than  80 had been injured. He put the Tiger casualty figures at over 100 and said that a group of around 500 would have been involved in the attack on the FDL. Six Tiger boats too had been destroyed in the Kilali lagoon as well.

The conflicting reports kept on coming with the LTTE insisting that they were present in parts of the islands and saying that they were in control of Mandaitivu. Tiger Military Spokesperson, Ilanthirayan said that cadres had landed on the islands of Mandaitivu and Kayts and only seven had died and 16 wounded in the first day of fighting.

Flushing out operation

Brig. Jayawardena said that pockets of Tiger activity was present in Kayts but that army commandos had been inducted into the island to flush out the Tigers.

The Tigers also claimed that they had breached the FDL. Robert Nielssen, an SLMM official was quoted in one wire service report that the monitors had information that indicated 10 army bunkers had been overrun on August 12, but the army had regained five.

Brig. Jayawardena said that a bunker falling does not mean the entire FDL was under  risk. "The soldiers would retreat and then go back and gain control." By late in the week it was evident that the Tigers were not making the advances they claimed but that fighting was not letting up as well.

"The attempt on capturing the entire Muhamalai and Kayts areas were foiled by troops on tactical handling of the ground conditions that allowed waves of LTTE young cadres to approach towards their deadly grounds," the Media Centre for National Security said.

"On August 12, the LTTE suffered 47 cadres in an attempt to breach the Muhamalai  Forward Defence Lines (FDL) and on 14th  another large number, approximately 92 persons during a confrontation at Muhamalai, Nagarkovil and Kayts. Meanwhile another 63 cadres died in Pudukkudiruppu while preparing to join their offensives on the same day. When Tigers launched attacks at Kayts on  August 15, troops killed another five cadres while troops on Muhamalai and Nagarkovil killed 42 who tried to storm the FDLs. The security forces on constant surveillance over terrorist artillery positions were successful in counter bombarding their gun positions in Pallai and Settikadu by killing 144 terrorists on  August 16," it added.

Handing over of  bodies

The army said that it was making arrangements to hand over 92  bodies of LTTE cadres through the ICRC. However ICRC officials said that they had not received any official communication from the government over the handing over even by August 18 morning.

After the fighting over the weekend, the Tigers had once again launched another wave on August 16 night around 6 p.m.  This time concentrating on the Kilali defence lines. But according to the army that too had been repulsed.

On that morning, the Tigers alleged that the air force had bombed an orphanage near Pudukkudiruppu area killing more than 60 underaged kids. That was the initial story, thereafter the Tigers said that teenage school children were undergoing first aid training in the building when the bombing took place.

The controversy has raged on from thereon. Both the SLMM and UNICEF were allowed access to the site, but the visits took place after a considerable time lapse after the attack. Pro-Tiger websites had made a statement referring to ICRC that the zone of the attack was a known humanitarian area. However ICRC sources said that the statement was seven years old and had no validity now.

Contradictory statements

The SLMM said that monitors could not locate any military-like installations near the site.

"UNICEF visited the site and four hospitals. UNICEF understands that the site was a former children's home which was no longer functioning.

"Reportedly school children aged mainly between 16-19 in Mullaitivu District and Kilinochchi District were attending a two-day first aid training course at the site. While visiting hospitals, UNICEF observed more than 100 children undergoing treatment," UNICEF's Colombo office said.

Minister Keheliya Rambukwella led the government counter charge that the building was a legitimate military target and was used by the Tigers as a preparatory base for cadres moving into the northern areas to take on the army.

The government went to the extent of making public images of the attack to prove its side of the story. The Tigers have been releasing video grabs from confrontations including those in the Mawilaru area and in Muhamalai on websites managed by supporters, but has thus far not made such a dramatic public display.

Unstable situation

As fighting spread to Jaffna the situation in and around Muttur did not dramatically improve in the last week. Several dozen families had in fact returned to the besieged town but aid workers still felt the situation too unstable.

On August 16, the ICRC visited the Pachchanoor area with Muslim civic leaders to locate bodies of Muslims massacred while fleeing Muttur. They were in an area controlled by the Tigers near the 64th mile post where there were reports that more than 60 Muslims had been  killed. However, the team could only locate two bodies that were later handed over to the Seruwila hospital. Aid agencies including the ICRC were still reluctant to move in and establish a permanent presence in Muttur late last week for fear of the security situation.

The violence by the end of the week had claimed the lives of more than 600 LTTE cadres according to the army and about 100 government military personnel. In the midst of the bloodshed, peace activists took to the streets in Colombo calling a halt to the fighting.

Vendaam, vendaam, yuddam vendaam -  epa, epa, yudde epa, (no war) they chanted slogans along the streets of Colombo 7.  Little after they gathered at the Viharamahadevi Park for a rally. Peace aside, a brawl erupted on the stage while Deputy Minister Mervyn Silva was speaking.

A group of monks from the National Bhikku Front stormed the stage, carrying placards that urged the peace protestors to take the rally to Kilinochchi.

It was a sad predicament of the country where a peace rally ended up in the man-handling of monks in robes and with screaming marchers. There is no light at the end of this tunnel, not at least any time soon.

Civilians want assurances to return

The civilians who had fled their homes in Muttur due to the fighting between the LTTE and the government forces have started returning to their villages from last week, but the bulk of the people still felt safe in the make-shift camps in Kantale.

Most were still not sure of the prevailing situation in those areas and are waiting for an appropriate time to go back. Nearly 1000  families had returned to Muttur by last week according to the officials monitoring the displaced civilians.

However thousands of civilians still remain in the camps due to fear of more violence in the future. The Muslim Aid Organisation said that 55,133 persons from 13,903 families are  still in 55 camps in Kantale, Mullippothanai and Kinniya.

Few returnees

"About 55 families have moved back to Muttur during the last couple of days," Abdul Saleem, Media Officer, Muslim Aid Organisation told The Sunday Leader.

According to Saleem, 60 deaths, 66 disapearances and 550 injuried had been recorded to date. 

While some civilians picked up their courage to go back and live in their homes, others who are willing to return to their homes wanted public places to be spared of any bombings or artillery attacks.

"The people know that the war will not stop and they have lost hope. Both parties will continue their attacks on each other. It is the civilians who get caught in the violence and are affected. They want assurances from both parties that public places such as schools and hospitals are spared of any sort of attacks," Saleem said.

He said that these people were  ready to go back if the two parties involved in the fighting would assure that they would consider the request. "This request from the people is reasonable," he added.

However, there are people who still feel that the situation would not change and would become worse in the coming days. "They are the people who are still in the camps," he said.

"There are now about 1000 families in Muttur, and there are people still moving in," said Moulavi Muzammil, an official monitoring the welfare of the displaced persons in As Shaffa - a camp in Kantale managed by the Akurana J. Ulama.

Temporary lull

He said that he and four others had gone to Muttur to look into the welfare of those who had returned to their homes after the violence had subsided.

"The people know that the fighting has stopped temporarily and they very well know that it might start  soon, even tomorrow. They are sure that the quietness is temporary and still smell war in the air," he added.

The rate of displaced persons returning to their villages also has increased during the last few days due to the relatively peaceful situation in the area.

Mohammed Rajiz, an official who is in Muttur said that it was visible that people wanted to return to their homes soon.

"Early last week, this town was deserted and no one was willing to come to their homes as the situation was  bad. But now, there are a few people moving about, I think mainly due to the absence of violence for a period of time. Nearly 700 people have come back to their villages during last week," Rajiz added.


Those who are in Muttur are also facing difficulties not due to violence, but due to the non-availability of essential items and facilities.

"The doctors have also left the place due to the violence and civilians are psychologically affected. They have to do something for their livelihood as well," Saleem added. The other issue faced by the people is the transport.

"The people face a lot of difficulties due to lack of transport facilities and are forced to walk a long distance or find another mode of transport, which is expensive," he added.

The situation in the camps also seemed to have affected the people and made them move back to their  homes.

The places where most of the camps are situated and the environment seemed to be quite harmful for those living in the camps.

"The situation in the camps is very bad, especially the environment," Rajiz said. Most camps are situated near paddy fields or a canal. There might be floods if it starts raining," he added.

Unhealthy environment

The civilians go out to the field for toilet purposes and bathe in the dirty canal water, which flows nearby. "They feel that being at home is much better than undergoing all these hardships," he added.

Saleem said that the shortage of space in the camps also forced the civilians to return to Muttur. Saleem said that Kantale was crowded with refugees than Mullippothanai or Kinniya.

"There are instances where more than one family occupied a tent. That is an uncomfortable situation for all who live inside," he said. Moulavi Muzammil on this issue said that there were 250 families living in approximately 80 tents.

"It is very difficult for all the persons to manage themselves in such a very small space. I think this issue also prompted some civilians to return to their homes," Muzammil said. 

Supply of cooked food also has been stopped during the last few days and the local communities helped the civilians with uncooked food.

The government has begun to play its part a little after the local communities started their work.

Earlier, the local communities said that the help by the government was small and everything were done by non-governmental organisations (NGOs) and voluntary organisations in the country.  

Free bus service

"The government has started a free bus service from Kantale and has started to restore telephone and electricity services in the area and dry rations are distributed to the civilians in Muttur through the government agent,"  Muzammil further said.

The security in the area seems to have been ensured by the government. The civilians wanted their safety ensured by either party for them to return to Muttur.

"There are more than 3000 security forces stationed at the border. Therefore there should not be any security threats for the people," added Rajiz.

Economy sliding towards instability warn donor agencies

Asian Development Bank Head, Alessandro Pio

By Mandana Ismail Abeywickrema

The country's economy is heading towards instability with the present security situation holding back investors and donor agencies from dispersing funds.

Concern has also been expressed over the imminent increase in the country's defence budget due to the present situation in the country, resulting in heavy balance of payment (BOP) issues.

Although the trade deficit has widened, it was partially offset by higher foreign currency inflows to the country through private remittances, which grew at 24 per cent during the first half of 2006, and higher net inflows to the government.

According to the Central Bank of Sri Lanka,  BOP has recorded a surplus of US$ 164 million by end July 2006. Reflecting the BOP surplus, the gross official reserves have marginally increased to US$ 2,542 million by August 11, 2006 from US$ 2,458 million at end 2005.

Donor agencies have warned that the present situation would have a long term impact on project implementation  in the country.

Asian Development Bank (ADB) Head, Alessandro Pio says that the present situation in the country would indeed have an impact on project implementation.

Projects on hold

Citing an example he said that the bank was processing a US$ 65 million water project for Jaffna where the source of water would be from Kilinochchi. However, the project is now on hold due to the security situation.

"All parties agreed to the project, but now it is impossible to implement it due to the present situation in the area," Pio said.

He also noted some of the other other problems with regard to implementing projects in the north and east were the difficulty in accessing the areas the projects are to be implemented and the difficulty in transporting building material to the areas.

As for the funding that is currently on hold where the ADB is concerned, due to the present situation in the country, Pio said he could not specify the amount.

The bank has however raised concern over the present situation in the country as it has a direct impact on development projects.

"Both sides agree that the development projects should go ahead, but the practical conditions are not the same," Pio noted.

Head, Board of Investment (BOI) in Sri Lanka, Prof. Lakshman R. Watawala observed that so far investors have not been deterred by the security situation and were entering the local market.

However,  he noted that a continuation and deterioration in the situation could have an impact on investor confidence. (See box)

The government however has expressed confidence in the economy continuing with its growth momentum recorded this year. The economy recorded  8.1 percent growth in the first three months of this year and is expected to record  8.0 growth  this year.

Two key sectors

The growth rate was due to the buoyant performance of the apparel sector and the boost in the construction industry following the December 2004 tsunami.

The Central Bank of Sri Lanka has also decided to maintain  interest rates at the  current level  due to  expanding economic activity as expected, underpinned by  robust global economic growth and sustained domestic demand. All major sectors are expected to perform well and contribute to overall growth in the economy.

However the violence in the north and east has had quite an impact, with international rating agencies Fitch and Standard and Poor's (S&P) downgrading Sri Lanka's national outlook to negative. Fitch assigned a BB - and S&P a B+.

Both agencies warned that an escalation of violence could lead to a full-scale civil war, which in turn would curb the country's growth while exerting heavy pressure on the Treasury.

 Senior Director, Fitch's Sovereign Team Paul Rawkins, has reportedly told the foreign media that Sri Lanka was continuing to perform well despite the seemingly unending bloodshed in the island's northeast and bomb attacks in Colombo.

"We looked at Sri Lanka again, and concluded that business confidence appears to be holding up - tourism remains surprisingly strong and there has been no downturn in foreign aid flows, and the balance of payments is proving to be resilient to higher oil prices," Rawkins has said.

Lavish spending

His concerns however were focused on the government's lavish spending habits that encourage runaway inflation, which was running at 10.4 percent in July.

"Our concerns lie with the macro-economic policy framework. Public finances remain weak, inflation is very high, credit growth is strong - arguably there is a need to tighten monetary policy further," he has further said.

"While the economy is much stronger and more flexible than it was during the time of the last serious conflict in 2000, a full-scale civil war would be very damaging for the rating," he had  warned.

Both agencies also noted there was no change in the country's credit rating, which currently stands at below investment grade.

Cost of living index

The cost of living index has recorded a marginal decline in July as against the figure in June.

However, certain items have seen an increase in prices.

According to the Census and Statistics Department, the Consumers' Price Index of the Colombo City (CCPI) for all items in  July was posted at 4672.5 index points. A decrease of 58.0 index points or 1.2 percent as against the June figure of 4730.5 index points. This is a decrease of Rs. 117.28 in the expenditure value of a market basket when compared to June 2006.

Food prices the department states exhibited a negative index point change of 75.8, from 5396.5 (June 2006) to 5278.9 (July 2006).

Index for fuel and light and miscellaneous items recorded  positive index point changes of 14.1 and 3.5 respectively, while very minimal increases were observed in clothing with 0.1 index point change.

The department further states the decrease in the CCPI for July, 2006 is mainly due to decreases in prices of sugar, garlic, tamarind, red onions, manioc, fresh fish - Balaya and Salaya, some varieties of dried fish, eggs, coconuts, potatoes and most varieties ofvegetables.

These price decreases have been mainly attributed to more supply of locally produced agricultural consumer goods specially the vegetables to the main markets in Colombo City.

However, prices of rice, bread, rice and curry, milk tea, jam (MD), most varieties of fresh fish and dried fish - Salaya have increased during this month.

According to statistics, inflation rate for the month of July was registered at 10.4, lower by 2.3 percentage points compared to the same period last year.

The month-on-month inflation rate of the Colombo City was the 0.3 percentage point higher than last month's rate.

The table below explains the composition of the decrease of 1.2%. It should be noted that in this basket, certain items play a more significant part than the others, depending on the weight of household consumption.

Of the total decrease of 1.2%, food itemsaccount fora decrease of 1.6%, mainly due to decreases in the prices ofvegetables (2.1%) and red onions (0.1%). There is an increase of 0.3% on account of fuel and light, mainly kerosene oil (0.17%) and firewood (0.13%). Other miscellaneous items have recorded an increase of 0.07%.

Investment not affected - BOI Chief

BOI Chief Prof. Lakshman R. Watawala claimed that the present situation in the country has  not had an impact on investors.

However the BOI is in the process of holding discussions with investors and last week held a discussion with private sector investors on the present situation in the country and action to be initiated.

Prof. Watawala said that the BOI has so far not received any cancellations of intended projects and were continuing to sign on new agreements.

He also noted that the board would continue with its investment promotion activities with a key promotion planned in India this week.

As for addressing the security concerns of the investors, Prof. Watawala said that the 12 trade zones were in protected areas and  the other factories out of the zones too  did not face any security issues as none of them were situated in the danger areas.

However, he  noted that a further escalation in violence in the country could deal a blow to investor confidence. 

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